Media M&A Continues Growth in First Half 2012
Transaction value and volume both up, driven by marketing services.
A first-half 2012 media M&A report was released today by investment bankers The Jordan, Edmiston Group Inc. and sales activity and values jumped significantly over the same period last year. Overall, the number of deals was up 52 percent to 652 while value rose 49 percent to $32 billion for the period. Marketing services-related transactions continue to drive the market.
This growth in M&A comes in the midst of very challenging macro economic issues, JEGI points out. Unemployment is still high in the U.S., Europe is challenged and big IPOs are lackluster. Nevertheless, market forces are proceeding at a rapid pace with digital engagement, social media and, especially, mobile having a huge impact on media. Consequently, companies are scrambling to get up to speed to build out and/or acquire marketing services operations to keep up with the consumer transition to digital and mobile.
All of this is to say the Marketing Services category has once again led the way in both number of transactions and overall value, according to JEGI. By itself, Marketing and Interactive Services accounted for 40 percent of the first-half transactions and 27 percent of the value. Combine that with three other related categoriesâ€”B-to-B and B-to-C Online Media and Technology and Mobile Media and Technologyâ€”and you have 79 percent of the deals and 75 percent of the value.
In this report, JEGI broke out Marketing & Interactive Services by sub-sectors. For the first half, Marketing Technology accounted for most of the deal value, at 37 percent. Ad agencies, however, scored the most dealsâ€”46. Digital agencies weren't far behind at 43 deals for the half.
Other highlights for the half include a 164 percent jump in number of transactions for exhibitions and conferences versus the same period last year. Deal value for events increased 165 percent, topping out at $437 million for the half.
The number of consumer magazine deals jumped from 16 in the first half of 2011 to 27 this year, but these were smaller deals. Value for the category actually dropped significantlyâ€”94 percentâ€”from $2 billion in 1H 2011 to $122 million in this year's first half.
B-to-b media deals were quiet with 14 deals worth a total of $82 million for the half.
JEGI's full report is available here.